Apple, Steve Jobs, and the Innovators Dilemma

by mcampbell on July 24, 2012

“A lot of times, people don’t know what they want until you show it to them.” (Steve Jobs in Business Week, 1998)

 

Apple spearheaded the disruptive innovation of personal computing and the technologies that would topple older, better established manufacturers of mini- and mainframe computing. Despite its initial success, Apple itself almost succumbed to competitive pressure due to the wide preference for the PC over its own proprietary Macintosh’s. The company was on the brink of collapse when Steve Jobs reassumed the mantle of leadership and, rather miraculously, put the company back on the path to dominance. As Apple was a very secondary player in the realm of desktop computing, he moved the company emphasis towards newer and more innovative markets, such as notebook computing and digital music players. The big breakthrough was the iPod.

The iPod is a prime example of a disruptive innovation; one that crippled the music industry. The capacity, flexibility, and sound quality of these tiny players were astounding. The iTunes service, allowing people to conveniently acquire individual songs instead of entire albums, was very appealing from a cost perspective. The result was that CD sales evaporated and the technology began the long march towards oblivion.

The iPhone was Apple’s response to the booming smartphone market. It wasn’t really radical (well-appointed smartphones already existed), it was simply better than the competition. It boasted strong features that lent to creative purposing (good camera, touch screen, large graphical display) and iTunes became the hub for content that now included new media: podcasts, text, and video.

The fact that the iPhone essentially cannibalizes the iPod market seems to have been Steve Jobs’ strategy on how to avoid the Innovator’s Dilemma; have the company concentrate on innovation and deliver excellent products, while letting profits take care of themselves. The success of the iPad, which cannibalizes Apple’s notebook market and may be the Disruptive Innovation that displaces the desktop PC, demonstrates the wisdom of this strategy.

 

(For more, please read this excellent article by James Allworth: http://blogs.hbr.org/cs/2011/10/steve_jobs_solved_the_innovato.html)

{ 1 comment… read it below or add one }

John July 26, 2012 at 10:36 am

+ you have to account for the 18-35 demographic and the cool factor – that helped swing the pendulum in Apple’s favour as well. Even though PCs still dominate, the overwhelming nuance of the hip factor makes the iRevolution seem even more successful. I think that iTunes is a fine application but the proprietary nature of the service dissaudes me from converting my MP3 files to this service.

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